The abuse and extortion scandal, which authorities have called the largest in Pakistan's history, allegedly involved hundreds of victims in Punjab province.
Two of the accused were jailed for life in April last year.
Judge Chaudhry Ilyas acquitted the men of "sexual abuse of a young boy and making a video to blackmail his family," a court official told AFP.
Prosecutors produced 16 witnesses against the accused men, but could not prove the charges, the official said. Another court official confirmed the details.
In the village of Hussain Khanwala in Kasur, southwest of Lahore, videos were made of at least 280 children being sexually abused by a gang who blackmailed their parents by threatening to leak the videos.
The police, who had conspicuously failed to act despite pleas from some parents, eventually made dozens of arrests after clashes between relatives and authorities brought the issue into the media spotlight.
In March 2016, Pakistan's Senate also passed a bill that criminalised sexual assault against minors, child pornography and trafficking for the first time -- previously only the acts of rape and sodomy were punishable by law.
Last week a court handed four death sentences to a man charged with raping and murdering a six-year-old girl, in a case that shocked the country and sparked major riots in his home district.
Imran Ali, 24, was on trial for killing Zainab Fatima Ameen in Kasur last month.
He faces further charges in the cases of at least seven other children attacked in the Punjab city -- five of whom were murdered -- in a spate of assaults that had stoked fears a serial child killer was on the loose.
Ali has confessed to all eight attacks, including the death of Zainab.